City of Scranton employees face payless paydays as early as two weeks from now unless the city is able to borrow $16.5 million, funding the city council jeopardized by refusing to make a city parking authority bond payment, Mayor Chris Doherty said Monday.

Mr. Doherty said the money represents 13 paydays, the equivalent of about half a year of pay for employees, in a year when the city has already struggled four or five times to meet payroll.

The city already has enough money to make payroll this Friday, but not yet enough for the next payday, June 22, the mayor said. The city has had to rely on advances of state money or state loans to cover the four or five earlier payrolls, he said. He expects tax collections will "probably get us into July sometime," but not through the summer unless money is borrowed.

Mr. Doherty also held out the possibility of going to court to force council to adopt a financial recovery plan that calls for steep tax hikes so that the city can borrow the money. The mayor has proposed a recovery plan that would, among other things, raise property taxes 78 percent over the next three years.

"One way or another, the money will come into the city because we don't go out of business," he said. "You're obligated to pay your employees; they have contracts."

The council's 3-to-1 vote last week against making a $940,000 authority bond payment chased off the lone bank, M&T Bank, willing to underwrite the issuing of $16 million in new bonds to cover the city's own red ink.

The city had agreed to make payments on the bonds if the authority could not. Parking authority officials have cited declining revenues as the reason the city needed to make the payment on the authority's behalf. M&T Bank officials decided they could not trust the city to make payments on any new bonds if it refused to meet its obligation to pay the authority bonds.

Repeated efforts to reach city council finance committee chairman Frank Joyce on Monday were unsuccessful.

City Business Administrator Ryan McGowan said he had tried at least a dozen times to reach Mr. Joyce since Thursday to discuss the implications of the vote and the need to pass a financial recovery plan that will satisfy bankers who will be asked to lend the city money.

A recovery plan would lock in how the city would repay the loan. Without that, banks will not loan the city money, Mr. McGowan said.

"I have yet to hear back from the financial chair since Thursday night," Mr. McGowan said. "And I mean, we're at a critical point here. I've called him numerous times. This is beyond critical at this point. We need to work together to move forward, or it's going to become even tougher. ... You have to address the problem, it's not going away."

City Councilman Jack Loscombe said Mr. Joyce and council President Janet Evans are working on an alternate recovery plan, but the work was delayed by Mrs. Evans' need to deal with her mother's grave illness. Mrs. Evans missed the council meeting Thursday for that reason, he said. Marion Tomko, Mrs. Evans' mother, died Sunday, Mr. Loscombe said.

Mr. Doherty said he has been in close contact with state Department of Economic and Community Development officials, who are monitoring the city's financial recovery from 20 years of distressed status. The officials plan to meet again today to discuss how the state might help the city, he said.

"They're very concerned about the city running out of money," Mr. Doherty said.

Department spokesman Steve Kratz said Gov. Tom Corbett has been "fully briefed" on the situation by department officials.

Mr. Doherty said state officials want the same assurances as banks: that the city is serious about improving its finances.

Mr. Doherty once again ruled out the possibility that the city would file for municipal bankruptcy, which would land it in federal court. The stigma of filing for bankruptcy and the likelihood that the outcome would be the same discourage the idea, he said.

Lawyers tell him a federal bankruptcy judge is just as likely to order the city to raise taxes as anything else, he said.

"For me, I'm not going to do it," he said. "I'll do everything I can to avoid it because I believe you should be responsible for your bills and just pay them and go on."

Mr. McGowan said the city continues to pay its bills, despite the authority bond default. The priority will be keeping the city's police cars, firetrucks and garbage trucks on the road first as bills become more difficult to pay with dwindling funds, he said.

Contact the writer: bkrawczeniuk@timesshamrock.com

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